Federal Information Security Contract Spending Continues Double-Digit Growth

Information security contract spending continues to show strong growth year-over-year as federal agencies combat cybersecurity risks and threats. Deltek’s analysis of prime contract spending from FY 2018 to FY 2020 indicates an 11% CAGR and an overall growth of 23%.

Deltek identifies information security related total prime contract obligations using over 300 keywords to search through the contract requirements descriptions within Federal Procurement Data System (FPDS) action records. This contract spending analysis provides a sense of spending scale and may not be all-inclusive. 

A large portion of the growth in contract obligations is driven by significant increases in spending by Defense Agencies, Air Force and the Department of State over the last three years. In addition, contract spending data contains more detailed descriptions of contract requirements, revealing more relevant information security spending.

Over the last three years, civilian agency contract spending for information security outpaced that of defense agencies and military services. Increases in civilian spending are driven in large part by an over 71% increase in State spending, mostly attributable to its global security engineering and supply chain services effort in FY 2020. Air Force spending makes up 32% of all DOD information security contract spending. Some of the agency’s largest contract actions support the Vinson Advanced Narrowband Digital Voice Terminal (ANDVT) and Cryptographic Modernization (VACM).

Top contract vehicles for information security spending include GSA Schedule 70, SEWP V, Seaport-e, and the Alliant Full and Open contracts.

One of the largest contract actions under Schedule 70 was with Dell for Microsoft Defender ATP in FY 2020. Another large contract action under Schedule 70 was by the Air Force with World Wide Technology for Tanium SME support and services for the Automated Remediation and Asset Discovery (ARAD) initiative. The largest contract action under SEWP V was by Customs and Border Protection with Mythics, Inc. for cybersecurity support services including Oracle hardware and software maintenance.

Cybersecurity budgets across federal agencies continue to show growth potential, driven by both operational and government-wide cyber policy directives. Deltek envisions continued strong growth in federal cybersecurity spending on both products and services. As a federal information security contractor or vendor, ensure your organization has access to agencies’ preferred acquisition vehicles for information security procurements, e.g. GSA Schedule 70, SEWP V, Alliant, etc. to stimulate new business. 

For more information on the federal cybersecurity market, see Deltek’s new report Federal Information Security Market, 2021-2023.